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Is Oppenheimer Gold & Special Mineral A (OPGSX) a Strong Mutual Fund Pick Right Now?

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If investors are looking at the Sector - Precious Metal fund category, Oppenheimer Gold & Special Mineral A (OPGSX - Free Report) could be a potential option. OPGSX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

The world of Sector - Precious Metal funds is an area filled with options, such as OPGSX. Usually, Sector - Precious Metal mutual funds invest in stocks with a focus on the mining and production of precious metals like gold, silver, platinum, and palladium. Here, stocks often trade as leveraged bets of the underlying commodity, meaning they're tied to the metal's prices and can be volatile.

History of Fund/Manager

OPGSX finds itself in the Oppenheimer family, based out of Denver, CO. Since Oppenheimer Gold & Special Mineral A made its debut in July of 1983, OPGSX has garnered more than $553.98 million in assets. The fund's current manager, Shanquan Li, has been in charge of the fund since July of 1997.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of -9.97%, and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 10.24%, which places it in the top third during this time-frame.

When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. OPGSX's standard deviation over the past three years is 37.2% compared to the category average of 13.75%. The standard deviation of the fund over the past 5 years is 37.29% compared to the category average of 37.79%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In the most recent bear market, OPGSX lost 45.9% and underperformed comparable funds by 9.84%. This makes the fund a possibly worse choice than its peers during a sliding market environment.

Investors should note that the fund has a 5-year beta of 0.1, so it is likely going to be less volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. With a negative alpha of -5.34, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, OPGSX is a load fund. It has an expense ratio of 1.15% compared to the category average of 1.38%. OPGSX is actually cheaper than its peers when you consider factors like cost.

This fund requires a minimum initial investment of $1,000, while there is no minimum for each subsequent investment.

Bottom Line

Overall, Oppenheimer Gold & Special Mineral A has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Oppenheimer Gold & Special Mineral A looks like a good potential choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Sector - Precious Metal, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.




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